New government spending must be approved by a referendum of citizens in many Swiss cantons. This decisionmaking procedure seems like a simple way to address citizen-legislator agency problems, but little systematic evidence is available concerning its effect on spending outcomes. We estimate...

Many organizations attempt to manage agency problems not with incentive contracts but by keeping the principal involved in the decision process, that is, by limiting delegation. This paper develops a model to investigate the economics of several decision processes that are commonly used to set...

This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent's ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they...

Many organizations attempt to manage agency problems not with incentive contracts but by keeping the principal involved in the decision process, that is, by limiting delegation. This paper develops a model to investigate the economics of several decision processes that are commonly used to set...

This paper develops a theory of organization based on the benefits and costs of internal capital markets. A central assumption is that the transaction cost of raising external funds is greater than the cost of internal funds. The benefit of internal resource allocation is that it gives the firm...

This paper explores the benefits and costs of the voter initiative, a direct democracy device that allows voters to make policy decisions without involving their elected representatives. Previous research suggests that by introducing quot;competitionquot; into the proposal process, the...

This paper investigates the hypothesis that tough antitrust enforcement in the 1960s led firms to engage in diversification programs by preventing them from growing within their own industries. If true, diversification should have occurred more often when large firms merged than when small firms...

This paper compares the fiscal policy of initiative and non-initiative states in the first half of the 20th century. States with initiatives had higher combined state and local expenditure after controlling for income and other demographics, but a lower ratio of state to local expenditure. This,...

This paper uses recent regulations that have required some companies to increase the number of outside directors on their boards to generate estimates of the effect of board independence on performance that are largely free from endogeneity problems. Our main finding is that the effectiveness of...

Voter initiatives are important for policy making in many countries. While much research shows that the initiative process affects policy choices, almost no evidence explains how the initiative process affects policy. Initiatives might change policy directly through voters approving laws that...